The U.S. economic calendar was empty on Monday. Investors will look for more direction on where the economy is headed when the Federal Reserve concludes its latest two-day policy meeting on Wednesday.

Economists expect the central bank to stay committed to low rates till 2014, with Chairman Ben Bernanke likely leaving the door open for further quantitative easing. Bernanke will also hold his quarterly news conference on Wednesday.

In corporate news, Nestle agreed to acquire Pfizer's ( PFE) infant nutrition business for $11.85 billion. Pfizer, the drugmaker, had put the unit up for sale in July. The company has been selling non-core operations as it focus on new drug development. Pfizer shares dipped 0.8% to $22.38.

Oil major ConocoPhillips ( COP) reported first-quarter earnings of $2.9 billion, down from $3 billion last year as its oil production declined following the halting of operations in China due to oil leaks as well as assets sales.

Excluding $330 million of special items, first-quarter 2012 adjusted earnings were $2.6 billion, or $2.02 a share, below the $2.08 a share expected by analysts. The company plans to spin off its refining business next week. The stock lost 0.7% to $72.33.

Broadly speaking, Cote of ING says that the big story should be U.S. corporate earnings despite a very volatile environment, and he felt investors should not read too much into the European situation. "The fundamentals are intact especially in the U.S.," he explains. "Earnings are having a blockbuster quarter ... an 82% surprise ratio is extraordinary."

June oil futures slipped 77 cents to settle at $103.11 a barrel, while June gold futures lost $10.2 to settle at $1,632.60 an ounce.

The benchmark 10-year Treasury was gaining 8/32, diluting the yield to 1.938%, while the U.S. dollar index was up 0.3%.




-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

>To contact the writer of this article, click here: Andrea Tse.

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